Configuring compensation plans allows organizations to reward employees based on their contributions by supporting multiple bonus plans for different groups of employees with different metrics and calculation rules. Compensation plans also track employee eligibility in different bonus plans for a given period for changes, such as employee promotions and transfers.
Compensation plans don’t have to be created for every compensation cycle period. You can define multiple effective date records for a compensation plan. The compensation plan can then be used in compensation cycles to determine bonus payouts. You can create a plan once, and then reuse it annually, semi-annually, quarterly, or monthly, depending on how often bonuses are paid. If you update a compensation plan for a period with changes to bonus factors or payout rules, then you can create an instance of the compensation plan with new effective dates and updated settings.
Only compensation plans that were configured for the dates within a compensation cycle period can be added to a cycle. Compensation cycles assign bonus payouts to eligible employees based on the rules configured for the assigned compensation plan.
The following topics describe how to configure compensation plans in more detail: